Facebook launches $1B affordable housing initiative, joining tech peers trying to close the gap – Big tech companies are spending big money to address the affordable housing shortage plaguing their communities. The latest is Facebook, which announced a $1 billion multi-pronged approach to the issue Tuesday, following similar commitments from Microsoft and Google.
The initiatives come as government officials struggle to get their arms around housing and homelessness crises in some of the most prosperous cities in the nation, namely San Francisco and Seattle. As federal funding for low-income housing programs stagnates, tech companies are increasingly under pressure to step up on housing because of the outsized impact they’ve had in the cities in which they operate.
Companies such as Amazon, Microsoft, Facebook, and Google pay staggering salaries and draw thousands of out-of-town tech workers who need housing and can afford to pay more than market rate. That phenomenon, combined with restrictive zoning, low supply, and a host of demographic and regulatory complications, led to the state of crisis Seattle and the Bay Area find themselves in today.
Facebook’s $1 billion will be spent over the next decade on a variety of initiatives:
- The company plans to spend $250 million in partnership with the State of California to build mixed-income housing on state-owned land in communities without enough supply.
- Another $150 million will go to the Bay’s Future Fund for the construction of affordable housing in San Francisco.
- Facebook is donating $225 million in previously purchased land near is headquarters in Menlo Park, Calif., to produce more than 1,500 units of mixed-income housing.
- Some $25 million will go toward the construction of housing on county-owned land for teachers and “other essential workers” in partnership with Santa Clara County.
- Facebook is earmarking the remaining $350 million for “additional commitments based on the rollout and effectiveness of the initiatives described above.”
Some of the flexible $350 million will also go toward “other communities where Facebook has offices,” according to the announcement.
Facebook’s largest presence outside of Menlo Park is in greater Seattle region, where Amazon, Microsoft, and others also call home. Facebook now has 5,000 employees in the Seattle area and continues to grow.
Seattle, like San Francisco, is struggling with a housing crisis that has displaced longtime residents and pushed thousands out onto the streets. A Facebook spokesperson would not go into detail about the company’s Seattle plans but said, “our goal is to have a comparable impact in all of the cities where we have offices, including Seattle.”
Microsoft announced a $500 million affordable housing initiative in January designed to spur more development of low- and middle-income housing in the Seattle region. Five months later, Google said it would invest $1 billion to help the Bay Area housing crisis. Amazon and Salesforce also announced contributions of their own this year.
While many welcome increased engagement from the tech industry on this issue, experts warn there are risks to depending on private philanthropy to deal with the housing crisis. Philanthropic dollars don’t have the same oversight as public funding and they can dry up in a recession.
“Philanthropy is a great step but affordable housing is a big problem that needs a diverse range of solutions and there is no universal template that fits for each community,” said Skylar Olsen, director of economic research for Zillow, earlier this year. “Policies focused on creating more housing in general are beneficial, as well as those focused on providing both a supply of and access to affordable housing.”